How will we stay afloat with the incoming hyperinflation?

[jpazz0]

Hey guys and fellow US bulk vendors, I’m really starting to panic a little bit considering the seemingly out of control gas prices and possible further increases in product costs as the incoming hyperinflation sets in. Anyone have any ideas they would like to share on how to alter our vending businesses to increase our odds of surviving this possible major economic crisis? Any ideas or insights will be greatly appreciated, thank you. 

[gumball guy]

2 hours ago, jpazz0 said:

Hey guys and fellow US bulk vendors, I’m really starting to panic a little bit considering the seemingly out of control gas prices and possible further increases in product costs as the incoming hyperinflation sets in. Anyone have any ideas they would like to share on how to alter our vending businesses to increase our odds of surviving this possible major economic crisis? Any ideas or insights will be greatly appreciated, thank you. 

In the past few years I have really made an effort to tighten up my routes geographically and it has made a noticeable impact to my bottom line. I sold off routes that were farther than 1 1/2 hours away and actually bought some routes that were within that tolerance. When I go out locating, I work in tightly predetermined areas and search every possible location in that area. I also go over my existing routes annually and make new locating runs through those geographic areas in an attempt to improve my density. 

I see so many competitors completely fill their machines in locations that just don't warrant it. Many vendors believe a machine that isn't full is a deterrent to stronger sales. I disagree. I tried this method years ago with some of my locations and anecdotally I found no gain in sales but instead a gain in stales. Throwing away stale product is obviously a profit killer so try to match your location's inventory to it's sales history.

Use the right machine for the location. Many locations do not need more than two bulk selections. Having a triple (or larger) in a slow location is just a waste of product and money. Again, I see competitors who have too big of a machine in slow locations. I generally will never put anything larger than a double in a new location. If sales there warrant a bigger machine then so be it and I will bring in a different set up.

Focus on gum whenever you can. I see a lot of competitors (usually small or new operators) out the streets who don't have gumballs or at least chicle gum in their machines. Gumballs are the highest profit item you can vend so I try to run it anywhere that it is allowed. People often think that gumballs won't sell in a location where there are no kids. Wrong. Some of my best gumball stops are businesses where there are no kids. Remember, it only takes one candy/gumball junkie to drive a location's sales. 

I'm not going to lie, the long term future of bulk vending is bleak. The number of people going cashless grows every year. Candy prices continue to climb and many manufacturers are opting to cease bulk candy offerings completely. The number of brick and mortar locations continue to decline in many areas as people opt to shop online and the list of challenges goes on and on. My advice to you if you are under 50 and in this business, come up with a career plan B because things will not get any easier in the coming years.  

[jpazz0]

9 hours ago, gumball guy said:

In the past few years I have really made an effort to tighten up my routes geographically and it has made a noticeable impact to my bottom line. I sold off routes that were farther than 1 1/2 hours away and actually bought some routes that were within that tolerance. When I go out locating, I work in tightly predetermined areas and search every possible location in that area. I also go over my existing routes annually and make new locating runs through those geographic areas in an attempt to improve my density. 

I see so many competitors completely fill their machines in locations that just don't warrant it. Many vendors believe a machine that isn't full is a deterrent to stronger sales. I disagree. I tried this method years ago with some of my locations and anecdotally I found no gain in sales but instead a gain in stales. Throwing away stale product is obviously a profit killer so try to match your location's inventory to it's sales history.

Use the right machine for the location. Many locations do not need more than two bulk selections. Having a triple (or larger) in a slow location is just a waste of product and money. Again, I see competitors who have too big of a machine in slow locations. I generally will never put anything larger than a double in a new location. If sales there warrant a bigger machine then so be it and I will bring in a different set up.

Focus on gum whenever you can. I see a lot of competitors (usually small or new operators) out the streets who don't have gumballs or at least chicle gum in their machines. Gumballs are the highest profit item you can vend so I try to run it anywhere that it is allowed. People often think that gumballs won't sell in a location where there are no kids. Wrong. Some of my best gumball stops are businesses where there are no kids. Remember, it only takes one candy/gumball junkie to drive a location's sales. 

I'm not going to lie, the long term future of bulk vending is bleak. The number of people going cashless grows every year. Candy prices continue to climb and many manufacturers are opting to cease bulk candy offerings completely. The number of brick and mortar locations continue to decline in many areas as people opt to shop online and the list of challenges goes on and on. My advice to you if you are under 50 and in this business, come up with a career plan B because things will not get any easier in the coming years.  

Thanks for the input gumball guy! This will certainly help me in my business and I’m sure will help a lot of others on this forum as well! Scary times for us vendors, I guess all we can do is take it one day at a time. 

[farmlane89]

We were Just talking about this in the annual  meeting of the NBVA. It seamed like there was a general consensus that the everyone has to an understanding that we all have to pay more which means the public has to pay more. We are starting to paying more for product that we need all we are doing is passing that price to the consumer. I have just ordered new mechs for mine, and bumping up the price. 

Just some fuel for thought. 

[jpazz0]

15 hours ago, farmlane89 said:

We were Just talking about this in the annual  meeting of the NBVA. It seamed like there was a general consensus that the everyone has to an understanding that we all have to pay more which means the public has to pay more. We are starting to paying more for product that we need all we are doing is passing that price to the consumer. I have just ordered new mechs for mine, and bumping up the price. 

Just some fuel for thought. 

Hi farmlane89, thank you for your feedback and insights. I’ve got to get around to attending the NBVA meeting one of these upcoming years. Yes, I agree, I guess our times right now are very similar to when the 10 cent dime mechanism died and the 25 cent quarter mechanism took its place. Unfortunately, I don’t see the 25 cent mechanism lasting much longer, 50 cents will be the bare minimum in the near future. Do you foresee sales going down temporarily while customers adjust to the higher prices or do you feel like business will stay the same?

[farmlane89]

7 hours ago, jpazz0 said:

Hi farmlane89, thank you for your feedback and insights. I’ve got to get around to attending the NBVA meeting one of these upcoming years. Yes, I agree, I guess our times right now are very similar to when the 10 cent dime mechanism died and the 25 cent quarter mechanism took its place. Unfortunately, I don’t see the 25 cent mechanism lasting much longer, 50 cents will be the bare minimum in the near future. Do you foresee sales going down temporarily while customers adjust to the higher prices or do you feel like business will stay the same?

I have been hearing the same thing through out other industries, and every business has to raze there prices to provide a steady income. I'm starting to see people charging .75-1.00 for flat vending, .50 has gone to .75 and .25 is going to .50.  All we are doing is passing the cost onto the consumer, and this is a great time since the consumer has already grown to accept it. The NBVA conference next year is looking to be March 28-30 2023, and looking to be back in Las Vegas.

[gumball guy]

I see no problem in raising prices due to inflation (gumballs excluded) but unfortunately for larger, independent operators, buying new coin mechs is prohibitively expensive. Flat vendors with ESD coin mechs can be easily switched over but for people running Oak or Northwestern bulk machines, coin mech replacement would be brutal if not impossible. If bulk vending were on it's way up and demand was high, I could possibly justify switching some over but unfortunately that isn't the case.

Now if I was a smaller vendor who was just starting out and buying new equipment I would definitely experiment with higher priced vends. I think that many of your busy locations may fall off because repeat customers won't like the idea of a 100% price hike for the same amount of product while others may roll with it.

At the end of the day our biggest challenge in bulk vending will be the continued decline in coin use by a society that is embracing cashless commerce.

[ginger vend]

I don't see customers willing to pay 50 cent for the same amount of product esp in regards to candy.  One of my laundry mats has a struggle paying 50 cents for toys but not stickers.  The toys blew out at 25 cents.

Does Oak even have a 50cent mech for 1.1 inch products/candy/gb machine?  Can't recall ever seeing one.  All my toy locations are Eagle or NW. 

[orsd]

27 minutes ago, ginger vend said:

I don't see customers willing to pay 50 cent for the same amount of product esp in regards to candy.  One of my laundry mats has a struggle paying 50 cents for toys but not stickers.  The toys blew out at 25 cents.

Does Oak even have a 50cent mech for 1.1 inch products/candy/gb machine?  Can't recall ever seeing one.  All my toy locations are Eagle or NW. 

Yes. They fit eagles as well.

[SSVEND]

Sadly, no matter which way you look at it, it's a dying business. Going on 20 years now and when I first started I started right off the bat running 2" at .75 and 1" at .50....fellow vendors thought I was crazy, but we were looking long term.  At this stage of the game it really wouldn't make much sense to invest in $1 mechs for 2". I'm just here riding this out for hopefully another year or two. Product is getting difficult to find...so many suppliers have gone out of business. Prices are insane, even for gumballs and it's only going to get worse. The business has been good to me, but it's no longer "fun" anymore.

[ginger vend]

19 hours ago, orsd said:

Yes. They fit eagles as well.

Tks good to know

[markvend]

On 3/22/2022 at 12:19 PM, SSVEND said:

Sadly, no matter which way you look at it, it's a dying business. Going on 20 years now and when I first started I started right off the bat running 2" at .75 and 1" at .50....fellow vendors thought I was crazy, but we were looking long term.  At this stage of the game it really wouldn't make much sense to invest in $1 mechs for 2". I'm just here riding this out for hopefully another year or two. Product is getting difficult to find...so many suppliers have gone out of business. Prices are insane, even for gumballs and it's only going to get worse. The business has been good to me, but it's no longer "fun" anymore.

I happened to get on the forum today after a several-year’s absence.  SSVEND, you’re the ONLY person I find on here I remember. It was also shocked at the surprisingly low number of posts compared to the early days.  It seems there is much less interest just like I thought.

I was in Bulk Vending from 2003 until the end of 2022 and bought around 3500 machines. I bought and sold some routes along the way but basically ran 2000-2700 machines by 2006 forward.  

 

We survived the 2006-2008 Great Recession and a multitude of price increases    Even Covid as bad as it was we came out better than expected  but with some major adjustments.

Thankfully I bought a small coffee shop where I live that my son started running.  It turned into a big operation the last 6 years with 5 locations and a roastery which started pulling me out of vending. 

I was able to sell my routes between 3 people at a fraction  of what I paid but was happy because I had gotten 20 years of good cash flow from them.

Even since I’ve sold product prices have continued to climb and even getting gum has been hard as many have mentioned (I could still buy at Sams in Arkansas when I quit).

What was working for me at the end was a few things (which is harder  I know now) was:

-moving away from MMs and Reese’s 

-beefing up toys and going to .75/$1 on racks   Bought mechs off Ebay for my beavers

-Extended routes service cycles

-Created sub routes where i could service my moneymakers at 2-3 months and left my low producer (mainly gumballs) for 9mo to a year just to milk out whatever return i could on that 20 year old asset.  We actually had a surprising percentage of machines that never moved for the 20 years and were actually on location nearly 30 years from when the previous owner first placed them .

By doing these things (especially the route extensions) I able to vend “when I could” after putting out fires from the profitable coffee business.  This was while still running almost 2k machines across a 400 mile wide route   I did see a small uptick in “lost” machines due to businesses closing, but they were acceptable losses for where i was at   Most people were very understanding as to why i couldn’t come every 3 months anymore   

Im sharing this to maybe bring a little encouragement in an increasingly discouraging environment. I have loved vending and miss it greatly along with the many friends and acquaintances i had over the years.  

 

For those with enough machines I do think  it could be nice “gravy money” if you kept the best locations and cut your time down to a minimum. If i stayed in it i was going to definitely take my best MMP locations and upgrade candy mechs to .50 at select locations because I had some high rollers but low profit.

Best of luck to everyone.

 

 

 

 

 

 

 

[SSVEND]

This is the type of business where a lot of people come and go. The ones that have hung on, can't seem to quite leave! Kinda like the mafia I suppose. haha

Since that post over a year ago, the majority of my business has been sold. I'm still holding onto a few locations for the time being. 

Looks like we started at the same time in the business. Man, those first 5 years sure were the best. I remember growing rapid fire...buying hundreds of machines and putting them out. Looking back it was so much easier finding locations then than it is now. It was a different world. It's been an adventure to say the least!

[markvend]

Yes, I hear you about the “different world”…that’s for sure.  I really really miss it even though i’m grossing way way more with what i’m doing now.   Those early years really rocked.  Thankful for a good 20 year run.  

[Bravo Duck]

Hey Mark this is Tom, ( I bought some of Marks routes when he moved on to the coffee business full time). A lot of your customers miss you too and ask about you every time I come through.

Your routes are doing well and even thriving. As we do on all our other routes we tweak them a little bit every time we run them ( upgrade to .50c mechs where appropriate and pull and replace the bottom 2 or 3 performers). 
 

Your routes are the best organized of any we have ever taken over and some of your best practices we are now implementing in the rest of our business.

I hope to have a cup of coffee with you the next time we are in your area and catch up. Be Blessed!